Saturday, April 18, 2009

Men's underwear sales, Greenspan's economic metric, reveal crisis

From Sam Stein's post with reporting by Arthur Delaney

As chairman of the Federal Reserve, Alan Greenspan was known for using quirky, proletariat metrics to judge the temperature of the economy. The most famous of these, as recounted by NPR's Robert Krulwich in January 2008, were the sales of men's underwear. If the economic scales dipped even the slightest, Greenspan reasoned, it was as sure a sign as any that people were truly feeling the pinch.

"If you look at sales of male underpants it's just pretty much a flat line, it hardly ever changes," Krulwich recounted after the publishing of Greenspan's book, "The Age Of Turbulence." "But on those few occasions where it dips that means that men are so pinched that they are deciding not to replace underpants. And [Greenspan] said 'that is almost always a prescient, forward impression that here comes trouble.'"

Well, here comes trouble.

A revised survey by the leading global research company, Mintel, shows relatively large drops in the sales of men's underwear in the United States. The study, to be released April 9, projects a 2.3 percent drop in sales of all men's underwear products in 2009. Underscoring just how quickly the market has gone south, in November 2008, Mintel had forecast sales to grow by 2.6 percent in 2009. A serious downturn led to a serious revision.

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